good morning. coming up on "your business," this michigan ferry service had more customers than they could handle and sinking their business. the changes they make to keep passengers and local officials happy to ensure calmer waters to the future. and the tell-tale signs that an employee is embezzling from your company. when it comes to making choices for your business, we have your back. that is coming up next on "your business." >> sponsored by american express.

don't do business without it. "your business" is sponsored by american express. don't do business without it. >> hi there, everyone. i'm j.j. ramberg and welcome to the beginning of the 13th season of "your business," the show dedicated to helping your growing business. picture this. one of your competitors gets bought out and suddenly new customers are giving your company a shot. sounds fab, right? not always. the family who owns a michigan ferry company really thought they were ready to navigate the busy summer travel season last year. but that is until passengers started showing up in droves and they realized that there was some rough watte-- waters ahead >> welcome aboard.

>> it was a wake-up call. it was everything from a slap in the face or a kick in the butt. we tried to organize ourselves but did we really nail it? no. we didn't. >> the summer of 2017 was one for the record books at shepler's macina island ferry in northesh michigan but not in the way the familiar would have hoped. >> did we think it would be like this? we never thought it would be like it is. it was like to the point where holy crow, we've never seen anything like this. >> it is far from smooth sailing that year. >> we did scramble and did our best to take care of everybody, but on busy days sometimes things fell through the cracks. >> passengers felt it and they were blunt about the disappointment in what the company calls first class service. >> she looked at me and said i just expect more from shepler's and talk about hitting you right between the eyes and in the heart. that how do you answer that?

and i said, ma'am, my name is chris shepler and i'm the president and what i can do for you and she said nothing. what can i expect from you. it is the first time they were serving macina island. a third company was sold but still chris and his sister and brother billy thought they were ready for the influx of passengers riding their family boats. they were wrong. >> it exploded. it was just crazy. the whole time. you were going full tilt every day last summer. >> the three siblings who run the company with their ceo father bill saw the trouble almost immediately. with the season already in full swing, there wasn't enough time to tackle all of the problems they suddenly faced. >> it was quite evident that the end of june and beginning of july, oh, we have our hands full. we kind of dealt with the growth on a day by day basis. when you think that it's over or it's easy up, it is not the

case. it downshifts and keeps right on going. >> the number of visitors jumped 23%. only adding to the turmoil. >> i think we talked about it, did it really sink in? did we really understand what that increase would do and how it would impact us from a day-to-day basis in a six month and year company? uh-huh. no. >> the company starting in 1945 by chris and patty and billy's grandparents had a following for generations. seeing customers issues firsthand was upsetting. knowing their personal reputation was on the line with the family name on the side of every boat. >> that pressure of only seeing them twice maybe every year or every other year, you only get those two chances to make an impression. and if we don't do it right, will they come back? they might come back to macina island but will they ride the shepler's ferry service? maybe, maybe not. >> and not having clear parking for guests in a dirt lot and

picking up a paper copy of the ticket after buying online were just a few of the problems. the business was missing consistency and it hurt customer relations. >> you could not complain about growth but think about it that growth can't complain about you. you think about not what is best for the company, you think about what is best for the guests and that turns into what is best for the company. >> community leaders didn't like the problem was having either and chris was taken to task for it. >> macina city called us into the principal's office and met with the city manager and the chief of police and they said, what are you going to do about this congestion and i said i don't have an answer for you right now. i don't. but i will. we have failed in areas that we will try to get better at. >> they were getting complaints from all sides. with no relief in sight. if they made any changes they risked losing long time customers and if there was nothing there was a chance the brand would be hurt.

the company had little choice. shepler's made more than $4 million worth of improvements by using their own cash and borrowing money. a newly paved parking lot alone cost over $1 million, including better signage and trams to bring passengers to the dock. these money matters kept chris up at night knowing if you could build it, customers might not come. >> every little decision on what we were going to spend, whether it was for a lawnmower or a new parking lot was greatly scrutinized as well do we need a new boat? no, we're not done figuring it out. >> the improvements definitely helped but there was no way that the company could have survived the last season and eased into this one without their staff. >> if you think you can grind your cast members to a pulp throughout the summer, i think that is the wrong way about running a business. they're just as important as i am and we couldn't do what we were doing without them. >> there is still plenty of work to be dop. staying on top of customer feedback is one way to see what working and what is not. >> some of them tell you about their experience and some of them don't and those that don't

are the ones that scare me the most because we don't know what they are thinking. >> as hard as it was at the time, shepler's needed to hit the re-set button and they've made a promise to themselves, they refuse to let their customers down again. >> we did get slapped in the face. and we needed it. what used to be busy is now a normal day. what is busy is now just trying to keep -- everyone in between the white lines. there is always curveballs. don't fight it. just kind of roll with it. if you don't have the mindset of every year, yes we'll do this and it will be great and a great season, then i think you're doing the wrong thing. but it is important. it is important for us all to be ready for whatever is to come. if a stranger came at you with a gun and stole money from your business, would you be angry to say the least. you would probably call the cops and quickly figure out how to deal with the loss. but for many small business

owners, theft is not so simple. often it is a trusted accountant or a book keep and not a stranger and that is why you might be reluctant to call the authorities and that is a recipe for catastrophe. we want to know what you can do to protect yourself and so we ke -- we went to atlanta to find out the answers. >> if you steal a quarter million dollars from me, you're going to jail. >> ruth king is a atlanta based business adviser who can't tabd -- stand to see entrepreneurs ripped off. >> i feel sick to my stomach. >> she's been through this so often she could spot a fraud before the business owner has noticed. >> i could walk into a business and smell it. they know something is wrong as a general rule and they don't know what it is and somebody needs to figure it out. >> our accounting system was having difficulties. or at least our bookkeeper claimed we were having difficulties. and things weren't matching up. >> brian spencer is a second

generation owner of atlanta based spencer heating and air-conditioning. he said he was so focused on clients, that he never worried about small glitches with his trusted bookkeeper marianne. >> she was the grandmother of the company. she would watch after our guys and make sure they were eating healthy and the perfect bookkeeper. she looked after things like it was her own. and took full responsibility for all of the finances. >> if there is always an excuse that you can't get the financial statements on time, for somebody who is supposedly knowing what they are doing, that should be a warning sign that goes, excuse me, what is going on here? and dig into it. >> it wasn't until the company switched over to online banking that he started to examine the bank statements. >> we knew the signatures were not mine. she had no check-writing privileges but she was signing my checks. so there was no doubt what was happening. >> first thing that we're going to do is create a report.

>> detective fran foster of the duluth police department in the atlanta suburbs sees this all of the time. >> it is very common and i've prosecuted quite a number of embezzlement cases. >> she said victims like brian often face painful decisions after con fronting the thief. >> as i recall she fell on the floor on hands and knees not to prosecute. >> i'll pay back. i'll make this right. please don't call the police and ruin my life. i've got a kids and wife and husbands and family. >> the detective doesn't buy what she calls sob stories. >> i've found in every single case that i've worked, every single one, there is a back story to this person's theft and usually it is starting from another employer who didn't call law enforcement. >> we learned after this she had done this in new york and that she had stolen from a company and they said they would not prosecute if she paid it back. she paid them back, came here

and it happened again. >> in brian's case, he fired marianne immediately. and then he called the cops. >> it turned out she had written about $180,000 worth of checks to herself, to friends, to family, and other places. >> are you afraid that any of your employees will steal this? >> nobody wants pipe. >> 95% of people in a blind survey admitted to stealing from their employers. >> ruth has written a warning to business owners citing a stack of cases like this, it is called the ugly truth about cash. >> we fixed the problem. we fix what is going on and then they have cash again. >> she said there is no foolproof way to prevent theft but if you set up some simple checks and balances for moneyaging money, you could make your company a much more difficult target. first rule, only you sign the checks. >> giving your bookkeeper check authority is insane. >> say you have an accounted

payable person and they have your permission to write checks. >> rule number two, have the company bank statements sent directly to your home or your computer. don't let anyone intercept it before you read it. >> people go why do i send my bank statements home? the reality is this. a lot of times there's automatic payments made to somebody you don't know and more often than not, that is to the embezzler's checking account. number two is if you remember signing a check for $100 and it is -- it is a thousand dollars is what is taken out of the checking account warning signs should go off something is not right. bank could have made a mistake but not likely. >> final rule, keep track of your monthly financials. >> if your balance sheet is not balancing, somebody is playing games. that is number one. and number two look at your p&l and if you see negatives where they are not supposed to be and you go why and go back to the bookkeeper and ask. your job is oversight. if you could spend 15 to 30 minutes a month, that is all you

have to do as an owner. >> bottom line, let everyone know you are watching. >> and if something doesn't look right and circle it and say g e give -- give me the back up for this. >> and it is important to staff but you need to verify. >> there have been many em bezzers that i found afterwards who start working for a company and then find they can't steal so they go to the next company and then that is where the theft happens. >> and if this sounds harsh, ruth would say you need to be harsh. >> i am here in chicago at the internet retailer conference and exhibition. so much is changing in the retail industry so we decided to come here where all of the experts are getting together to find out what is coming new. and today i have dara meeks. so good to see you. vice president of the communo group. thank you for stopping by. >> thank you for having me. >> and we'll talk about payments. i remember the first time i used my phone to pay for something

and it was amazing. or the first time i went into the apple store and they brought an ipad and i just paid sitting in my seat and not having to go to cash register and this is just the beginning. >> it is just the beginning. there is so much happening out there. the world is changing so quickly. and it feels like there is an endless future for us. mobility is one part of that. and as we keep growing as an industry, i think it is in retail and in every part of what you do in your future. >> so as a retailer right now, small or median or maybe growing to be very large retailer, do i need to be forward-thinking about this? or can i just follow the big guys and that will work better for me? >> i think it is a combination. i think it is what you have as your internal support to take those initiatives personally. forward th forward-thinking is a way to go to expand the customer base and have more customer satisfaction. >> so for instance, facial recognition is coming. so i'm on my phone and buying something and i don't -- i don't

have to put my credit card or anything, paypal or just look at it and it is paid for. >> it is one of the new things coming up. it is already taken such attraction overseas in china where they have a lot of i.d. based industries that could support this. and it is just going to keep carrying over into the u.s. and other countries. where people look for this. it is a customization. >> so will this just be something that i use almost like how retailers use paypal. will this just be a third party software, something that i use to put on my site or in my store. >> sure. >> so i don't actually have to do that much myself. i just have to incorporate it. >> right. that is correct. there is applications that people will do trials with. they're going to figure out where they could put it on to. is it going to be -- an apple or a google or a samsung phone but once they get that down and figure out who is using it and what they will use it for, it will be explosive and just going to go across all of the streams. >> facial recognition is one. >> yes. >> what else. >> there is all kinds of things.

the identification with fingerprint is the biggest thing. it is the safest and most secure and coming into the facial recognition and there is other payment industries coming out like bitcoin. one of the unsure things but with new progress, you might see other transitions. and then the question is does paper go away. so these are all of the things factoring in. >> what was fascinating over the holiday season, i saw a chart of the stores accepting bitcoin and then with ico, there is other kinds of currency out there as well. >> right. it is incredible. bitcoin with a wallet selection now, people are getting more secure about it. i think the phase the initial scare is kind of over and people are trying to embrace it and figure out that is the next new thing. anything where they are doing is simple and fast and secure is the way of the future. >> so how do you pars all of this out as a business owner and figure out what you should be following or offering. >> sure. it is tough.

when you first have to look at whos who you are trying to target and what is your customer base and your goals for the future. are you running a brick and mortar or online and then figure out when the target base what will appeal to have them keep coming back to you and as you do that, you'll find the right solutions. go out and do your research and find out who you want to do partnerships with and bring them in and see what connects and what you could go in with your operations and move forward. >> and how quickly is this going to change? >> oh, it is rapid. it is every day. i look at new partnerships and i read about every day in the news and i talk to people going out and doing new experiments. world is changing. >> in a year from now do you think i'll be paying with most things with my face. >> it is very possible. if people change and they really have that desire, then the companies will change along with it and, yes, i think that things within the next year to two will be facial recognition, mobile 90% of it. one application that helped us early on was called clerky.

it allowed you to use templates to incorporate and provide legal advice early on. spotted places used it as a what to incorporate as a delaware c-corp and it was very hassle-free and allowed us to do it in half of the amount of time. >> what helps me is to broadcast faster. and this is an amazing show because jason has started and interviewing different founders and different kind of witnesses and it is all about metrics and it could be about business planning. which is quite different than other companies for example in the consumer space so i listen to it regularly. >> i love to use xero for my bookkeeping needs. they're cheap and it is $30 a month. they spend two hours helping me set everything up and my accountant absolutely loves that i use them. so much easier than quickbooks.

>> so start up fund.com has been a great help to the company and it allows us to put our business plan up online and to reach out to investors and allow them to see us and tell us how we're doing and if they're interested in investing in the company they could reach out and we'll have a meeting but it is great to have everything consolidated in one place to be accessed around the world and it helps when investors say can i see your pitch deck and all they have a mobile phone because sometimes you don't have a computer and everybody has their iphone with them so it helps with that. i'm here with this week's elevator pitcher trevor bayock here to tell our panelists a great service called -- >> free your arms. >> you have got props with you. i'm going to let you do the pitch in there. but tell me, how old is the company. >> we're a little bit over three years old. >> and have you raised money yet? >> no, we're bootstrapping. >> you used to doing pitching.

>> this is my first. >> how do you feel? >> i feel good. >> you've been practicing. >> yes. >> my mentors make sure i practice. >> fantastic. i feel like -- let's roll your suitcase in here and tell me who you are pitching to. two really fantastic entrepreneurs and the really fantastic entrepreneurs, one is rick stolmayer. the other is the founder and ceo of wheels up, a private aviation company. let's see how you do. >> hi, i'm drivtrevor. i'm the founder of free your arms. i want to share with you how we give hotels a competitive edge. as travelers we all have a common problem. sometimes we arrive way before our check in. so we waste valuable time stouing or bags instead of going

directly to the theater, museum, sight seeing, you name it. free your arms solves this problem. we meet the traveler at the airport, the train station or anywhere in the city. we pick up the bags and deliver them to the hotel. we have been in existence for three years, our prices are very reasonable, and we have great reviews. what's not to love. let me show you how to take a load off of your shoulders, off of your schedule, and out of your arms. >> i love free your arms at the end, nice job, trevor, good job. i need from one to ten, first, what do you think of the product, the service in this case, and the second, what do you think of the pitch, one through ten. >> i'm ready. >> so i give you an eight on the product. that is an innovative idea.

you're attacking a problem that is real. you have done it, you demonstrated it, defending that might be a challenge, there is other services that could maybe disrupt it, the pitch was pretty good. i think you could work on it more, give more examples of how a business traveler could use it as opposed to someone that's on vacation. >> my big reveal. product, nine, we're in the gig economy. people making their lives easier. you have to put them where if you want to go out about your day. >> and you deal with travelers all day long. >> yes, we sell convenience. freeing your arms and freeing your mind. the pitch is an eight, i think that if i was giving you advice

on the pitch, it would just be relax, it's in your body, it's in your bones, you're doing it, the passion needs to come through, a little less rehearsed and more from the heart, i think that really resonates with entrepreneurs. >> trevor, my bags are downstairs. >> we appreciate your advice, very helpful, thank you. when we come back, we talk about patience. why you need to take your time before releasing a new product and pacing yourself with scaling your business. it's pretty amazing out there. the world is full of more possibilities than ever before. and american express has your back every step of the way-

whether it's the comfort of knowing help is just a call away with global assist. or getting financing to fund your business. no one has your back like american express. so where ever you go. we're right there with you. the powerful backing of american express. don't do business without it. don't live life without it. we have this e-mail who rajeev. how do you deal with the art of patient when you're scaling a business. >> i still don't have it, but over the areas i have learned that when i didn't have a long-term plan, i didn't have any patience. i wanted everything right away. the longer term your to go, the easier it is to take a breath and allow time for

things to come together. patience has grown for me based on the longer term planning cycle. >> now we have the top two tips you need to grow your business. rick and kenny back with us once again. you have given us some good advice, but you both started companies from nothing that blew up. mind body is how big? >> about $250 million in revenue right now. >> about 68,000 businesses running on it. you started from nothing, tell me something that everyone should follow, are what you learned along the way. >> i advise a number of entrepreneurs, they're thinking about marketing strategies but they have not proven a product market fit. the first thing you have to do is prove you built a product or service that somebody wants.

like trevor, the most important part is that he has been operating and proving he has customers. >> i don't even think this is for entrepreneurs, if you have an an ongoing business, it is easy to just say that i think everyone will love this. sometimes entrepreneurs, they thought through the whole structure of the company, how they will leverage social media, market it, and they don't have anything yet. >> and you had net jets, and now you have started another company, the same space,ish, you have an amazing track record. >> thank you, wheels up. we're more of a subscription

model, five years in, i would say we're definitely proof that anything is possible in america. >> that is good to remind ourselves especially these days. tell me one thing you have learned. >> i learned that you can't be scared to pivot. no business plan, i know in no business, and the people you interview, the people that hit it are the ones that can move. there is no straight line, you have to pivot. if you don't and you're too hard core to your original plan you're not going to get to the rainbow. >> what was your scariest pivot? >> i would not say they're scary, it is scarier not to piv pivot. i think the zero to 15 hour flier, a person just getting into the space, that piece of impairment is much bigger. >> congratulations to you, all of your success, many times

over, thank you j.j. >> if you get stuck anywhere, you call us. >> believe me, you're the first call i'm going to make. we're going old school with this week's your biz selfie. it is from tc and brandi dibella who have the pinball museum. they also buy, sell, and repair these knowledge digital pieces of arcade entertainment. end us your business at yourbusiness @msnbc.com. we love hearing from you, if you have questions or comments or you want to say high, end an e-mail to msnbc.com. also, click on our website.

we put up everything from today's show and more for you. don't forget to connect on our digital and social media platforms as well. check out the podcast been there, built that, it is so much fun to do. i have so many interesting conversations with really successful founders and ceos. you can tune in where ever you get your pod cast. we look forward to seeing you next time. until them, remember we make your business our business. the line between work and life hasn't just blurred. it's gone. that's why you need someone behind you. not just a card. an entire support system. whether visiting the airport lounge to catch up on what's really important. or even using those hard-earned points

to squeeze in a little family time. no one has your back like american express. so no matter where you're going... we're right there with you. the powerful backing of american express. don't do business without it. don't live life without it. very good morning to all of you. i'm alex witt, it is 8:00 out east. john brennan has spoken on camera for the first time since his security clearance was revoked. >> he is drunk on power, he really is. security clearances are snag are solemn and sacred and they should not be used for political purposes. these are